Inside Breuckelen Distilling's Labor of Love

Entering the light-filled space that houses Breuckelen Distilling, a small-batch producer of artisanal gin and American whiskey, you may find owner Brad Estabrooke taste testing Mason jars of alcohol. He does this to find the "heart" of the batch that has just been distilled, the middle portion that has the right balance of flavors. The spirit is tongue-scorchingly intense stuff: It has yet to be diluted and turned into the marketable liquor for which the distillery is known.
Estabrooke, 34, is a lean, intense man of average height. On the day Entrepreneur.com visits, he is wearing stained work jeans and a gray T-shirt advertising 77 Whiskey, one of his products. One of his employees, Osiris Martinez, 30, sits at a work bench nearby bottling whiskies and sealing them with wax. To do this, he dips the head of each bottle in a tub of hot black wax -- something like a fondue fountain -- and then places them on a rack to cool.

When Breuckelen Distilling sold its first bottles in July 2010, it became the first gin distillery in Brooklyn since Prohibition. Micro-distilleries have popped up around the country in the past several years, ever since new laws were passed making small operations economically viable, for instance by reducing the cost of getting a distiller's license. Estabrooke's entire operation employs five people, including its founder, and runs in a 2,500-square-foot space in the borough's Sunset Park neighborhood. The location once served as a boiler r
Like so many entrepreneurs these days, Estabrooke began his journey as a result of the recession. After eight years of being a bond trader, including a stint at Fidelity, he was laid off in December 2008. By then he had already decided to found a distillery. The layoff accelerated his plans.

He went to his friends and family for money. He managed to raise a six-figure amount -- he won't say exactly how much, but notes that it was only a third of what his original business plan called for. Still, he was grateful for the votes of confidence. "Some of them believed in the vision, but I think most of them just believed in me," he says of his investors.

Now his libations are available in 13 U.S. states and in Washington, D.C., and are also distributed in Europe and Australia. "We've sold as much gin in Europe this year as we have in the U.S.," Estabrooke says.

Breuckelen Distilling is part of a resurgence in manufacturing in a borough once known for its huge factories. But where Brooklyn's old-time manufacturers employed thousands of workers, most of the borough's producers today are small-scale, artisanal affairs.

Which is not to say their growth isn't impressive. Although Estabrooke originally thought his distillery would be the only one in Brooklyn, it now has plenty of company -- Kings County Distillery in Bushwick and New York Distilling Co. in the Brooklyn Navy Yard, among several others.

Among his fellow Brooklyn artisans, Estabrooke singles out for praise Rick and Michael Mast, two brothers who have been producing upscale chocolate bars in Williamsburg since 2007. He also tips his cap to Brooklyn Brine Co., a four-year-old manufacturer of specialty pickled vegetables, and to Gorilla Coffee, which operates a café in Park Slope and plans to open a 4,000-square-foot roasting facility and coffee bar in the Gowanus neighborhood this fall.

But Estabrooke has harsh words for 3D printing, a phenomenon often lumped together with businesses like his when describing Brooklyn's new wave of manufacturing. "That's a crock of shit," he says. "That's not manufacturing. That's designing." As he sees it, "five guys sitting around a 3D printer" is a world apart from the hard work of turning grains into spirits.

Spirit distillation is indeed a labor-intensive process, at least when you do it from scratch, as Breuckelen Distilling does. It begins with pallets of organic grain shipped from a farm upstate, whose contents are milled into flour. The flour is dumped into a mash tank, along with water and enzymes. The resulting mixture is heated, then cooled, combined with yeast and pumped into one of four 18-foot-high steel fermenters. Then a custom-built copper pot still receives the now-alcoholic liquid, known as the wash, and heats it to the point of evaporation. The alcohol steam passes through a condensation coil and re-condenses into a colorless spirit which is drained into Mason jars. This product can either be placed in oak barrels to age into whiskey, or re-distilled with botanicals to become gin.

Breuckelen Distilling sold about 1,500 cases of liquor in 2012, Estabrooke says. It is on track to sell 2,000 cases this year, and should turn a profit for the first time. (At Astor Wines and Spirits, a major retailer in New York City, the distillery's gin sells for $32 a bottle, while both whiskies sell for a little more than $40 a bottle.) So far, the distillery has stayed afloat with traditional loans and additional seed funding. He raised a second friends-and-family round shortly after opening.

Although money is a concern, Estabrooke is more focused on perfecting his craft. He enjoys discussing the many variables that influence a spirit's taste, including light, temperature and climate, even the type of soil in which the grain was grown. "At the end of the day, you have to surrender to what you have and where you are and to your ingredients," he says, regarding an oak barrel and its slowly aging contents. "This is going to be a New York whiskey."

Startups Eschew the Made in America Label

From Martha Stewart's American Made event to Entrepreneur magazine's recent spread on the theme, the obsession with the Made in America label has reached a fever pitch. But what do you do when your product idea can't be made in the U.S.?
That's the question Simon Ford and Malte Barnekow found themselves pondering in 2009, when they were canvassing different locales to house their spirits brand, The 86 Company. "We actually looked to distillers and suppliers in several countries to partner with on making an old school Carta Blanca rum, like the ones that came from Cuba during Prohibition, There were distillers that make excellent rum and were willing to work with us, but didn't have the knowledge and capabilities for the style we wanted to create."
And while the two New York City-based founders considered facilities in the U.S., which accounts for most of the company's sales, they noted a lack of manufacturing capabilities as a core reason why America was out. "Local manufacturing in the U.S. is simply not competitive," says Barnekow. "In my experience, it's twice the price for half the quality, across the board."
In recent years, the U.S. has certainly seen a resurgence in manufacturing, with companies like American Giant and Black & Denim making a commitment to produce products stateside. And various marketplaces and services such as Etsy and Maker's Row have sprouted to support them

Still, some startup founders, who would normally choose to set up shop or source ingredients in the U.S., are either finding the process prohibitively expensive or impossible due to a lack of resources.
Runa is a Brooklyn-based beverage company (with a nonprofit branch) that makes tea and an energy drinks. Yet the main ingredient for the company's tea is called guayusa, a leaf from trees that grow in the Amazon. To harvest the leaf, which required making connections with farmers in Ecuador, was a challenge in itself. "We had to figure out if and how [Ecuadorian] communities wanted to work with us, and we had to get a product regulated and accepted in the U.S. that hadn’t been sold there before," says Dan MacCombie, Runa's co-founder.
MacCombie and Runa co-founder Tyler Gage spent the first six months of the company's life traveling around South America, scouting out places to source their guayusa. The trek also required "convincing people we were legit, had good intentions and we weren’t a bunch of North Americans coming to screw them out of their money and their land, which unfortunately, is something they’ve experienced in the past," adds MacCombie.
Despite its benefits, having a global operation, comes with many headaches. Just ask Jamal Motlagh of Acustom, a New York-based custom clothing company that uses digital technologies to create bespoke menswear.

"Legal issues such as tariffs and import duties have been problematic," says Motlagh, whose company uses fabric sourced everywhere from North Carolina to Turkey but operates mainly out of a factory in China. "Import has been the biggest issue into China. The problem there is that you need a ground logistics team that you can trust. Fabric production and supply is still an old-school game. There aren’t good websites or ways to get a hold of them or their offices globally."
The 86 Company's Barnekow adds that working with distillers from around the world comes with its own set of challenges. "Our caps are from England, our bottles from China, our liquids from Canada, England, Mexico and Panama," he says. "So, yes, we deal with the tedium of time differences, currency fluctuations, regulation, complex tax constructs and a shipping industry that has very little time for small entrepreneurs like ourselves. It makes for a very nice story from a marketing and product perspective, but it does make our day-today lives extremely difficult."
To minimize this difficulty here are three tips that have helped these founders make their international operations work:
Right size your expectations.
"In my experience, a general rule is work with suppliers that are the same size as you," says Barnekow. "Large suppliers are designed to serve large customers. If you are a small company, look for small suppliers. You will speak the same language and have an understanding for each other’s incentives."

Focus on the positive.
"The moment where we think everything would be easier [if we were based] in the U.S. happens every day, but it wouldn’t make me want to run this company," says MacCombie from Runa. "We connect the farmers to the land to the supply chain to the market… I know people starting tea companies now -- good people, more power to them -- but I don’t feel that’s what I want to contribute to the world. The complexity of working with farmers, supporting ecosystems -- that’s what keeps it interesting. I spend more of my time selling tea, but it’s always in the back of my head that I’m doing something that really aligns directly with what I believe in."
Make the most of your situation.
Working directly with the people in the factories as well as the sourcing companies has been very interesting, and I use the time difference to my advantage," says Jamal from Acustom. "I send questions during my work day and later in the night, I’ll get an answer back… So when I wake up, they’ve had a full day to work on whatever the question or problem was."

3 Things You Need to Know About Launching a Product Business

It is a golden-age for innovation with companies revamping the business of invention and democratizing the way we monetize new ideas. Think Kickstarter, Quirky and -- shameless plug of my own business -- Trident Design.
If you have an idea for a brilliant invention (you know you have at least one!) and are thinking about pursuing it, your options -- apart from suing people based on patents -- can be grouped into three categories: make and sell it yourself, license it or submit it to a crowdsourcing site.
How do you know which one of these paths is the right one for you and your idea? That can be a confusing question, and there is no “right” answer. Let's take a look at the first option: starting a company to make and sell your invention.
Making and selling a product yourself means setting up production, business systems and a sales team. It is exciting, challenging and a lot of work. It can’t really be done casually given that a normal manufacturing company can have many employees.
I have seen many lives made stressful by people underestimating the challenges of starting a product company. You should only pursue this path if you are so passionate about your product that you want to sleep with it under your pillow. It should be your undying dream to stand at the prow of a yacht with the name of your product on its side.
1. You can make (or lose) a whole bunch of money. The pro side of the equation is that starting a company can add up to bigger numbers for you and your business. If you build a successful product, you can sell a business rather than license intellectual property, which can have a much higher value.
Starting a business has the biggest potential payoff out of all the ways of commercializing your idea but you will need the wherewithal, ability to build a team and passion for your product. Be honest about your level of commitment to a product before you risk too much.
Despite what you might think from seeing “easy” Kickstarter successes, starting a business requires tremendous effort and investment. Once you have half of your life savings invested will you be able to walk away? Only go down this path if you can’t help but do it because you can’t not do it. If you can conceive of a world where you license the product, that is probably your best option -- at least at first.
2. It takes twice as long as you think to get to market. I have launched more than 70 products myself. Products take about twice as long and cost twice as much as people think they will, no matter how well you think you’ve planned. This means you need to be extra conservative when assessing what you can afford to risk in a product venture. I have seen many promising products fail because the inventor had to return to other employment in order to pay the bills.
3. You can't stop at just one product. Another thing to be aware of is that you will need to immediately start developing follow-up products in order for your company to survive. Very few companies survive on just one or two products. You have to keep adding new items every year in order to stay relevant and ahead of the innovation curve. If you don’t have ideas, you need to be considering where you are going to source them. They will cost money to develop and may need to be brought to market before the first product is fully developed in the marketplace.
I do not intend to sound discouraging. Making and selling your own products is a rush and we are getting ready to launch a couple of Kickstarter campaigns here at Trident for products we feel passionate about ourselves.
But go in with their eyes open, ready to smash all the obstacles that will present themselves and stick it out through the long slog to victory. I've met many inventors who unwittingly got in way over their heads and could have pursued a much lower risk path to commercialization, like licensing or submitting.
Take a look at your idea. Ask yourself the following questions and answer honestly:

• How much do I love this product and want to live and breathe it every day?
• Do I want to keep my day job?
• Am I in love with the industry of my idea, or do I just want to make money?
• How much do I love sleep?
• How much money can I access? How much will I need?
• What lifestyle do I want?
• According to experts, how big is the opportunity is this idea?

If you are honest with yourself and still want to start a company, go for it! If I raise doubts in your mind, please, seriously consider other options.